Internships: Low-Paid, Unpaid Or Just Plain Illegal?

Students fill out applications during a job fair at the University of Illinois Springfield in February. Fed up with working for free, some interns are suing their employers.

Seth Perlman
/ AP

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Originally published on May 18, 2013 6:47 pm

Summer is almost here, and with it comes the army of interns marching into countless American workplaces. Yet what was once an opportunity for the inexperienced is becoming a front-line labor issue.

More and more, unpaid and low-paid interns are feeling their labor is being exploited. Some are even willing to push back — with lawsuits.

One of the most high profile intern-versus-employer lawsuits suffered a setback last week that could have implications for other cases. A judge in New York ruled that a group of 3,000 unpaid interns could not sue the Hearst Corp. as a class, but would have to file individual cases against the company.

"It is important, and it is a setback in the sense that it becomes harder for groups of interns to get together, and it makes it less likely that lawyers will take those cases," Ross Perlin says.

Perlin knows the plight of the unpaid intern well. A former intern himself, Perlin was inspired by his experiences to write his first book, Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy.

"The internship has become virtually a requirement for getting into the white-collar workforce, certainly. It's something that the majority of students at four-year colleges do at least once before they graduate. Many do it two, three, four more times," Perlin says.

"An estimated quarter or third of all internships are unpaid, many more are low-paid as well," he adds. "So those are the ones we're really focusing on because there are thousands of internships each year in the U.S. that are illegal according to the law."

Perlin offers a few red flags to look out for when deciding on an internship program. "If they're asking for somebody who has deep experience with Photoshop, can design websites, and has lots of other experience, and then they're saying, 'Oh, sorry, we're actually not going to be able to pay.' "

If a company's offering school credit, Perlin says, that should also raise a red flag because school credit is given out by schools. "That really shouldn't come into play unless there is a real relationship between an employer and a given college," he says.

Of course, good internships aren't illegal or exploitative. If the company has an established intern-training program, has a designated intern coordinator and details the skills interns will learn, Perlin says, chances are that intern will have a good experience.

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Transcript

JACKI LYDEN, HOST:

Summer is almost here, and with it comes the army of interns who will turn up in countless American workplaces. It can be a boom for the inexperienced. But more and more, interns are growing restless that they're being exploited. Increasingly, interns have been willing to push back; some have even sued.

This week, one of those cases suffered a setback when a judge in New York ruled that a group of 3,000 former interns could not pursue a lawsuit against the Hearst Corporation as a class action. They would each have to sue the company as individuals.

To understand what this means for interns, we turn to Ross Perlin. He's the author of "Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy." Welcome to the show, Ross.

ROSS PERLIN: Thanks for having me on the show, Jacki.

LYDEN: A bit of a cynical title.

PERLIN: Well, perhaps, but I think it's also just kind of a reality that the internship has become virtually a requirement for getting into the white-collar workforce certainly. It's something that the majority of students at four-year colleges do at least once before they graduate; many do it two, three, four or more times. An estimated quarter or third of all internships are unpaid. Many more are low-paid as well. So those are the ones we're really focusing on.

LYDEN: So, Ross, take us into some where these extended unpaid internships have become contentious.

PERLIN: The five lawsuits that have been filed encompass the one you've mentioned, Jacki, involving Hearst, and that's a fashion and kind of media internship. You're looking at elite model management. It's kind of the last of these lawsuits to have been filed. An internship involving sports and kind of sports management stuff. There is the first of these lawsuits involving the "Black Swan" film with Fox Searchlight Pictures. There's a film that made $300 million, had many unpaid interns working on it, doing very fundamental work like keeping the books. And they were unpaid. And this is a widespread problem in the world of film.

The "Black Swan" case, as I understand, they are going through this process of ensuring that it's going to be certified as a class - all the interns who are involved. And I should say that this decision on the Hearst case also about whether or not all the interns who worked there can be considered a class. It is a setback in the sense that it becomes harder for groups of interns to kind of get together. And it makes it less likely that lawyers will take those cases.

One of these cases has been settled already that involved the "Charlie Rose" program. And that was settled not long ago for, I believe, a quarter of a million dollars. So that one is not setting any kind of precedent, but at least the interns are going to see some of their wages at last.

LYDEN: But let's take "Black Swan" or Hearst. You can make the argument that this looks great on the resume. Why should interns expect to have rights in the workplace?

PERLIN: I think there are a lot of reasons why interns should have rights in the way that other workers do. I think it's particularly as internships have become a kind of broken signal as those opportunities were not there at the end of the hard work, that people realized that this sort of informal bargain was already being sort of broken. And people were having to do more and more internships to get there. And even at that point, they were going to be left doing precarious forms of labor as freelancers and temps and other things.

LYDEN: So I am sure by now, we've thoroughly bummed out people seeking internships. Any red flags that people should look for?

PERLIN: Well, first, I should say that, of course, there are really good internships out there. In terms of red flags, in terms of identifying problematic internships from the start, in general, any for-profit company that's advertising an unpaid internship, you have to look at it very carefully. So it has to be clear that they understand that it's really a training program.

If they're asking, you know, for somebody who has deep experience with Photoshop, can design websites and, you know, has lots of other experience, and then they're saying, well, sorry, we're actually not going to be able to pay. And by the way, you know, we'll give you some school credit. That also should raise a red flag because school credit is given out by schools, and that really should not come into play unless there is a real relationship that's been built between the employer and a given college.

LYDEN: Ross Perlin is the author of "Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy." Ross, thank you for speaking with us.